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What Happens To Uber Drivers And Other Sharing Economy Workers Injured On The Job?

This article is more than 9 years old.

Omar, a 32-year-old Uber driver, was working a typical late-night shift in Los Angeles last month when his ride veered from pleasant to violent in just a few minutes. When he pulled his SUV full of passengers up to the Hollywood Tower apartments around 2:30 a.m., two of the riders refused to leave his car. An argument broke out, and Omar said one of the passengers hit him with a shiny object, broke his jaw in two places and landed him in the hospital for a week.

Omar's not the only worker to find that a newfangled job like driving for Uber comes with some very old dangers: on-the-job injuries. On Sunday, an off-duty Boston cop assaulted his Uber driver, yelled racial slurs at him and stole his car. In Los Angeles, people stabbed an Uber driver in the face and neck in November and choked another driver on New Year's Day, though in both cases the attacker was likely not the passenger Uber assigned the driver. A San Francisco passenger attacked his Uber driver in November, landing him in the hospital with facial injuries. A Lyft passenger punched his driver and broke his nose in May. And it's not just headline-grabbing assaults -- if any Homejoy cleaner falls while mopping or any Instacart shopper throws out their back while carrying groceries, they're in the same boat.

In each case, the injured worker can't turn to the platform for a dime of help. As much as workers like Omar may think of themselves as employees of peer-to-peer marketplaces like Uber, Lyft, TaskRabbit, Instacart, Postmates or Homejoy, they're not, legally speaking. Companies are under no obligation to provide the same worker protections for independent contractors as they are for employees -- protections like overtime, paid sick days, health insurance and workers' compensation.

Two damaged teeth, one surgery and a week-long hospital stay later, Omar, who didn't want to include his last name, is stuck with sky-high medical bills and limited options. His only source of income is driving for Uber's high-end Black and SUV platforms -- the Los Angeles police investigative report even lists his occupation as "Uber driver." He believes Uber should help pay for some of his bills -- after all, he was hurt while on the job, earning Uber commission money.

But as an independent contractor, just like almost all workers in the sharing economy, Omar isn't entitled to workers' compensation, which is designed to pay for work-related injuries and lost wages. To make matters worse, he doesn't have his own health insurance, despite the Affordable Care Act's individual mandate.

Unlike employees, independent contractors are largely free to set their own hours, pick their own clients and control other aspects of their work. In exchange, if they get hurt while working, whatever the reason, they're on their own. Some sharing-economy workers are experienced freelancers, but many -- like Omar -- have never before relied on contract work for their full-time income, and they may not realize the full stakes of the tradeoff.

"They don't have to show up to work on Monday at 9 a.m. if they don't want to," said Nick Woodfield, an attorney with the Employment Law Group. "What they're not understanding is that this lack of control -- where they can have a two-hour lunch if they want, or no lunch at all -- that freedom comes at the price of if they're in an accident, the company doesn't have to pay."

Can Workers' Compensation Fit Into The Sharing Economy?

Omar has some reason to believe Uber might pay for his broken jaw. Most American taxi drivers are independent contractors, but they still get workers' compensation in several major jurisdictions -- Washington, Colorado and New York states, plus San Francisco and Chicago, among others. Taxi drivers have always faced violent work environments -- federal statistics show they're 21 to 33 times as likely to be killed other workers. Though car-service apps eliminate some risk factors like handling cash, others remain: working alone, at night, in urban neighborhoods and with drunk people.

Some companies might worry that providing workers' compensation to contractors could make them look like employees, giving fuel to lawsuits that claim Handy cleaners and Uber drivers are misclassified as contractors. But Woodfield and other attorneys say that it would not be a major factor. Courts still look mostly to how the company controls a worker, not to whether it provides insurance.

Workers' compensation could even protect companies when a worker is injured. It's a two-way street: the company agrees to cover on-the-job injuries, while the worker gives up the right to sue the company, so the damages they can collect are capped. If, for example, Omar or an attorney were able to show that Uber had been negligent by assigning him a known violent passenger, he could sue for an unlimited amount.

But in many other ways, workers' compensation doesn't make sense for independent contractor workforces. It traditionally covers lost wages, which would be difficult to determine for contractors who set their own hours. What about workers who get their income from several platforms but are injured on one and unable to work at all, or people whose on-the-job hours aren't so clear, like Airbnb hosts? Peers, a sharing-economy marketplace, recently started offering Airbnb insurance that includes lost-wages protection and car-replacement insurance for Uber, Lyft and Sidecar drivers whose cars are in the shop, but it's clear that workers' compensation as it was designed decades ago doesn't quite fit into a quickly-shifting sharing economy business model.

"There are parts of workers' compensation that these companies could take on," said Denise Cheng, an MIT affiliate researcher whose thesis focuses on labor in the sharing economy. "It could parallel or mirror a lot of what workers' compensation looks like on a legal basis. But it might not make sense to call it workers' comp."

'An Employment Scenario That They Don't Understand'

The sharing economy is growing, and with it the number of workers who piece together income from multiple independent-contractor jobs -- what's dubbed the "gig economy" or "freelance economy." No longer under the protective wing of employee-dom, some workers appreciate the flexibility and independence but don't realize that it comes with many costs that an employer usually covers. And sharing economy companies, eager to plump up their workforce, don't always advertise that a worker's take-home pay has to cover everything from taxes to health insurance, though Uber and Lyft both offer tools to help their drivers find health insurance. Uber declined to comment on on this story beyond saying the company is in touch with Omar and other injured drivers. A Lyft spokeswoman said in a statement that "the nature of Lyft's relationship with drivers is very different than the typical employee relationship in which an employer would provide workers' comp insurance."

It's easy to say that drivers like Omar should know better than to expect platforms to support them like employees, and he admits it was a mistake not to have health insurance. But there's still a feeling among workers that they trust the company they work for. In Cheng's research, she found workers who felt such an emotional connection to the company that they referred to its executives as "our CEO" or by first name. And these companies promise flexible jobs with low barriers to entry that can earn $25 or more per hour -- tantalizing offers to people who really need the money, or to people who aren't familiar with the cost structure of freelance work. "The problem is you have a workforce that is naïve, perhaps, to the compensation arrangement they're in," Woodfield said. "You're introducing a number of people into an employment scenario that they don't understand."

Some people are trying to solve this vulnerability by attacking companies with misclassification suits. If they can show in court that these workers are actually employees, then the companies will be forced to provide benefits. But a successful lawsuit takes years, and some industry observers like Cheng thinks it's the wrong strategy. "Worker misclassification is going to become weaker and weaker," she said. "It doesn't make sense to hinge everything on that. What we should think through is, 'What should the protections be for an independent contractor?'"

More and more workers will need to get their benefits outside of traditional jobs, said Peers executive director Shelby Clark. He thinks work and benefits will eventually decouple, just like pensions did a generation ago. Uber CEO Travis Kalanick called Obamacare "huge" for his company and said it allows drivers to free themselves from "the Man." During that transition, though, whose job is it to educate independent contractors on how to protect themselves? Clark says it can come from the government, from third-party groups, or from the companies themselves -- though there's nothing requiring anyone to step up.

"Frankly, I think as long as the courts are ratifying this business model, this is the problem," Woodfield said. "A company may feel it has some moral obligation, but it doesn't have a legal obligation to teach people how to run business models."

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